• September 27, 2023

Legislation proposes sandbox for Ohio’s financial technology industry | Ohio

(The Center Square) – The Ohio General Assembly has spent the past two years whittling away at business regulations, and the effort continued this week in a new bill aimed at the financial technology industry.

The legislation, introduced by Sen. Steve Wilson, R-Maineville, would create a “regulatory sandbox” for financial technology businesses, and proponents hope that would make state regulations easier to navigate, less expensive and more transparent.

A sandbox allows live testing of new products or services in a regulated environment. That can help keep and attract new business to the state, groups such as Columbus-based think tank The Buckeye Institute said.

“Ohio has one of the nation’s largest financial service sectors in the country but risks losing these employers due to regulations that prohibit companies from developing and deploying new products and services,” said Logan Kolas, an economic policy analyst with the Economic Research Center at The Buckeye Institute. “The policies in Senator Wilson’s bill, which incorporates many of The Buckeye Institute’s recommendations, will ensure that Ohio’s regulatory process allows and encourages fintech companies to develop and offer new and better services to their customers. These changes will keep Ohio competitive in the innovation race and will keep jobs in Ohio.”

Senate Bill 249 would create the voluntary sandbox and prioritize consumer safety. It also allows companies that maintain a physical presence in the U.S. or conduct virtual operations to apply for the sandbox, and it would create opportunities for those participating in Ohio’s sandbox to operate in other state sandboxes.

Examination of the state’s business regulations began last year when the General Assembly passed and the governor signed a law that reduced red tape.

The effort continued in the spring when Sen. Kristina Roegner, R-Hudson, introduced Senate Bill 9, which would cut business regulations by 30%.

Roegner pointed to the Ohio Administrative Code, which she said contains 15 million words and about 274,000 unique restrictions, on top of the more than 1 million federal restrictions.

“It’s truly a wonder that anyone wants to start a business with that much red tape to navigate,” she said.

The Mercatus Center at George Mason University’s State RegData project, which analyzed regulations in 44 states and the District of Columbia, ranked Ohio behind only California and New York as being the most restrictive states.

While reducing regulations by 30% by 2024, SB 9 would create an inventory of restrictions in an effort to give policymakers a clearer view of red tape, cap restrictions, open an online portal to give businesses easier access to rules and restrictions and allow the Ohio Legislature’s Joint Committee on Agency Rule Review to ease regulation reduction requirements.

SB 9 passed the Senate earlier this year but remains in a House committee

Lawmakers have support from organizations such as the National Federation of Independent Business, the Ohio Chamber of Commerce and The Buckeye Institute.

“We believe that SB 9 can help businesses who operate in Ohio by reducing the overall regulatory burden,” Kevin Boehner, director of small business and workforce policy for the Ohio Chamber of Commerce, testified. “At the same time, we acknowledge that a 30% reduction for each agency may be difficult to accomplish. However, in order to increase economic competitiveness, encourage free enterprise and create the best economic environment for businesses to thrive in our state, reduction of overall regulations is an important objective.”